Pakistan international Airlines (PIA) management, contrary to its extension plan submitted to the government wherein 42 more aircraft were to be procured, have agreed to shrink operations by signing an agreement with Turkish Airlines (THY).
Under the terms of the agreement, PIA will surrender all its existing routes to Europe and America except London, Oslo, Copenhagen and Paris. PIA will continue to operate direct flights to Toronto from hubs in Pakistan. In addition PIA will restart flights on the Houston route which it had suspended following heavy losses over 4 years ago. Under the agreement there will be 21 flights between Pakistan and Turkey, out of which PIA will operate 17 flights and THY just four. PIA will provide 5th and 6th freedom traffic to THY and serve as a feeder airline of THY, which will carry these passengers for onward flights to Europe and beyond by THY aircraft under a Code Sharing Partnership Agreement.
Sources confirmed that an agreement between the two airlines has been finalised which awaits final approval from the PIA Board of Directors, having already been vetted by the Chairman of PIA, who is also Minister for Defence and a personal friend of the Pakistani President.
So this agreement means that PIA passengers heading for New York and Chicago will now be carried by its own aircraft up to Turkey, from where they will proceed to their destination after a change of aircraft to THY for onward flights. The same will be the case for PIA passengers booked to all European destinations other than those mentioned above. Traffic at Istanbul airport looks set to skyrocket as a result of this deal. Given the problems that PIA has had in the past with MRO contracts it is likely that THY will, in time, collect some of this business also.
There is no comfort for PIA in this agreement, it all seems to be great news for THY. Indeed, under the terms of this MOU, PIA will provide a guaranteed load for THY, for which PIA will receive commission, however if this guaranteed load is not provided PIA will pay for the loss of revenue. In case of overbooking during peak loads, PIA will pay for regular fare difference charged by THY. The frequency of 21 feeder flights from Pakistan will be split equally between Karachi, Lahore and Islamabad. Similarly THY will provide feeder passenger services for flights operated by PIA from Pakistan to Colombo, Kathmandu and Dacca.
All PIA and THY regional operations remain unaffected as do all routes outside of Europe and North America. THY will provide catering on all PIA aircraft operating to or through Europe.